Many people wait to file bankruptcy because they are concerned about their credit scores. Potential filers are smart to consider credit-rating consequences, but may further harm their credit score by delaying filing for bankruptcy.

Arkansas Bankruptcy Associates, PLLC runs a credit report on each of its clients. The credit reporting company that we use gives clients an accurate 12-month predicted credit score. In many cases, we see predicted score increases of anywhere from 50-150 points during the one year following filing for bankruptcy.

However, full credit-score recovery following bankruptcy can take five to seven years. The good news? Filers can often obtain a loan soon after completing their bankruptcy because:

•Debt to income ratios have improved

•Unsecured debts have been discharged

•Creditors know that bankruptcy filers can only discharge debt through bankruptcy once every six years under Chapter 13 and once every eight years under Chapter 7. Therefore, if someone has filed recently, creditors know their debt is "safe" from another bankruptcy.

Consider other factors when weighing the advantages of bankruptcy against credit concerns:

•Credit terms may be poorer immediately after bankruptcy, but when the cost of the credit terms are weighed against discharged debt, you'll find that you save money.

•Terms often improve fairly soon after bankruptcy.

•If you apply for credit in the fourth year following bankruptcy, creditors may be impressed by your debt repayment history following bankruptcy and offer attractive lending terms.

FROM DEBT

TO RELIEF

Contact Information

Arkansas Bankruptcy Associates, PLLC offers a FREE initial bankruptcy case review by telephone with an attorney for up to 15 minutes.

Evening and weekend appointments are available for our clients by request.

Contact us at (501) 313-4972 to arrange an in-person visit or a visit over the Internet using Skype, ooVoo, or FaceTime.